Every year, billions of dollars are recorded as remittances
worldwide. With the advent of technology, there are several ways to send
money home. With so many options available, it is very important to
make the right choice to avoid paying an exorbitant fee to transfer
money. There are three basic factors to be considered while transferring
money. Understanding each of them will help us in sending money in the
most optimal method.
1. Mode of Transfer
There are a couple of aspects while choosing a mode of money transfer. They are:
- location of the sender and the receiver
- awareness levels of the technology and the availability of the same
- time availability and affordability
Taking all of the above into consideration, one can select a medium that best suits him/her.
Cash Transfer
One
of the oldest methods of sending money, a cash transfer is a simple
process of sending cash through a money transferrer. The receiver can
collect the money or have it delivered by the money transferrer.
Bank Transfer
Today,
several money transferrers have tied up with many leading international
banks to empower their customers to make a bank transfer. Through this
service, one can transfer money to the recipient's bank account.
Online Money Transfer
One
can sit at the comfort of their home or work and send money through an
online remittance portal. Most portals have the facility to remit the
money to a bank account/ credit card /cash payout.
Mobile Money Transfer
This
method of money transfer is ideal for those who have limited access to
banks and transfer agents. Through this method, money can be sent to a
recipient's mobile phone or mobile wallet. This is widely used in many
countries in the African continent. Some of the other countries that
have this facility are Bangladesh, Kenya, India and Philippines.
2. Cost of Transfer
The
cost of sending money will depend on the exchange rates, mode of
transfer (cash, bank, online), the commission charges levied by the
remittance house etc. And they will vary depending on the service
provider's network and the other value added services offered. Simply
put, at the end of the transaction, calculating how much of money the
recipient receives will give an idea of the cost of transaction. While
availing a particular type of money transfer service, one should be well
informed about the below:
Exchange Rate: This is the rate at
which one currency is exchanged with another. This rate will vary from
time to time, depending on the global financial scenario and other
economic factors. It is always wise to wait until the receiver's
currency value is lesser than the sender's currency value, so that more
money can be sent. For instance, if someone living in the USA wants to
send money to Mexico, they should ideally transfer money when the value
of peso is lesser than dollar, so that, for each dollar more pesos can
be sent.
Fees: This is the fees charged for transferring the money
and will depend on the service provider and the mode of money transfer.
Tax:
Some countries also levy a value added tax that is charged on the
commission/ service fees. For more information speak to the customer
care executive before you make a transaction.
3. Comparison
It
is always good to weigh all the available options before transferring
money. Comparing the exchange rates at various times will help in
understanding the pattern. While one service provider might have a wide
network, another might boast of having state-of-the-art technology.
Hence understanding one's needs and choosing accordingly is crucial.
Always
ensure you ask for a record of the transaction (bill/e-receipt) at the
end of the transaction. This will authenticate the transaction and act
as a reference for future purposes. Sending money home can be
overwhelming with so many avenues, but gets easy once the above factors
have been well considered
Custom assistance in training online. Academic help always available. Contact at any time.
